I am pleased to present to you the Proposed Budget for Fiscal Year This covers the period of July 1 st, 2017 to June 30 th 2018.

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1 FINANCE 511 Washington St., Ste. 207 The Dalles, OR p: [541] o f: [541] Pioneering pathways to prosperity. Wasco County Fiscal Year 2018 Budget Message I am pleased to present to you the Proposed Budget for Fiscal Year This covers the period of July 1 st, 2017 to June 30 th The budget has been prepared to satisfy the legal requirements of Wasco County and the State of Oregon local budget law. The value and purpose of the budget is to provide a financial plan for the next fiscal year, authorize local government spending, justify the property tax levy and is a tool to communicate and inform any interested party. The primary purpose of this budget is to recognize the cost of service approach to develop and implement a fiscally sound and sustainable plan to accomplish the goals of the county in the next fiscal period and beyond. Additionally, the budget must meet the principal objectives of maintaining a responsive local government, comparatively low taxes and fees, high service levels and a strong financial position. I am confident the Proposed Budget built by the management team of Wasco County meets these purposes. The budget has several significant changes from the prior budget. First is a significant increase in the Oregon Public Employees Retirement System (PERS) contribution rate for the county. This PERS increase is 24.7% to 30.7% of the current contribution depending on the class of employee. The second significant change is the Weed & Pest fund is being closed out to the Public Works fund. The function will continue, just residing as a part of the Public Works fund. The Weed & Pest fund will only appear in the budget to transfer the fund balance to the Public Works fund. The Proposed Budget has 25 funds totaling $55,649,947. Revenues are not changing much as shown in the following charts. There continues to be a lull in federal funding.

2 Fund Description FY17 Budget FY18 Budget Difference % GENERAL FUND $ 20,117,190 $19284,203 $ (832,987) -4% The main operating fund for Wasco County PUBLIC WORKS FUND $ 7,969,180 $ 8,257,083 $ 287,903 4% The fund for Road and Weed & Pes control COUNTY FAIR FUND $ 278,841 $ 256,349 $ (22,492) -8% County Fair operating fund COUNTY SCHOOL FUND $ 290,000 $ 312,550 $ 22,550 8% Tax in lieu payments flow through LAND CORNER PRESERVATION FUND $ 101,411 $ 75,738 $ (25,673) -25% Dedicated to locating and remarking of land FOREST HEALTH PROGRAM FUND $ 77,219 $ 129,211 $ 51,992 67% Federal dollars to fund search and rescue operations on federal lands HOUSEHOLD HAZARDOUS WASTE FUND $ 583,064 $ 514,910 $ (68,154) -12% Fee paid as part of garbage collection bill dedicated to recycling SPECIAL ECON DEV PAYMENTS FUND $ 2,130,800 $ 1,306,283 $ (824,517) -39% Revenue committed for economic development LAW LIBRARY FUND $ 158,285 $ 159,106 $ 821 1% Dedicated revenue from citations that goes to maintaining law libraries DISTRICT ATTORNEY $ 21,335 $ 18,400 $ (2,935) -14% Forfeiture dollars and donations to victims of crimes MUSEUM $ 296,475 $ 288,540 $ (7,935) -3% Operations and donations for Wasco County Historical Museum WEED & PEST CONTROL FUND $ 384,100 $ 220,495 $ (163,605) -43% Former operating fund for weed and pest control merging into Public Works fund in FY COMMUNICATIONS FUND $ 1,016,192 $ 1,070,425 $ 54,233 5% Operating fund for 911 services PARKS FUND $ 205,960 $ 262,694 $ 56,734 28% Operating fund for Hunt Park COMMUNITY CORRECTIONS FUND $ 2,450,382 $ 1,995,707 $ (454,675) -19% Operating fund for parole and probation services COURT FACILITIES SECURITY FUND $ 91,107 $ 142,071 $ 50,964 56% State funded established to provide courthouse security 232 YOUTH THINK $ 259,725 $ 214,435 $ (45,290) -17% State funded operations to provide services for children and families KRAMER FIELD FUND $ 33,145 $ 33,434 $ 289 1% Private donations to upgrade Kramer Field CLERK RECORDS FUND $ 50,825 $ 44,802 $ (6,023) -12% Funded by recording fees to cover archival costs ROAD RESERVE FUND $ 2,815,000 $ 4,850,437 $ 2,035,437 72% Reserve fund for Public Works EQUIPMENT RESERVE $ 240,600 $ 91,795 $ (148,805) -62% To save for 911 equipment replacements FACILITY CAPITAL RESERVE $ 2,734,000 $ 3,429,005 $ 695,005 25% Fund established to save for large capital projects GENERAL OPERATING RESERVE $ 2,812,000 $ 3,607,552 $ 795,552 28% Fund to save for unanticipated revenue shortfalls

3 Fund Description FY17 Budget FY18 Budget Difference % CDBG GRANT FUND $ 5,508,670 $ 5,365,122 $ (143,548) -3% Capital projects fund for Center for Living project CAPITAL ACQUISITIONS FUND $ 2,802,650 $ 3,709,600 $ 906,950 32% The main capital fund for Wasco County Total Budget Change $ 53,428,156 $55,649,947 $ 2,221,791 4% Due to a transfer of $2.0 million of fund balance from the Public Works fund to the Road Fund reserve, the budget appears to have grown. However, that is not the case as the transfer inflates the actual budget. The overall decrease in the budget when transfers of fund balance to reserves are ignored is due to planned events. The plan was to draw down fund balances in fiscal year County staff are pursuing the goal of sustainability and succession planning to build the budget and this is a result of those goals. When just operating expenses government wide are compared (personnel and materials & service) the increase between fiscal year 2017 projected expense and the Proposed Budget is right at $20 thousand or 0.1%.

4 FY15 OPERATING REVENUE GOVERMENTWIDE - $18,104,035 License, Fees & Permits 10% State Funding 27% Property Tax 45% Federal Funding 7% Charges for Services 5% Rents 1% All Others 5% FY16 OPERATING REVENUE GOVERMENTWIDE - $20,289,413 License, Fees & Permits 10% Property Tax 41% State Funding 26% All Others 11% Federal Funding 6% Charges for Services 5% Rents 1%

5 FY17 PROJECTED OPERATING REVENUE GOVERMENTWIDE - $23,606,132 License, Fees & Permits 8% Property Tax 36% State Funding 25% All Others 16% Federal Funding 10% Charges for Services 4% Rents 1% FY18 PROPOSED OPERATING REVENUE GOVERMENTWIDE - $23,602,362 License, Fees & Permits 9% Property Tax 38% State Funding 23% All Others 15% Federal Funding 10% Charges for Services 4% Rents 1%

6 FY15 OPERATING EXPENSE GOVERMENTWIDE - $15,896,039 Materials & Services, 7,498,585, 47% Personnel, 8,397,454, 53% FY16 OPERATING EXPENSE GOVERMENTWIDE - $16,158,451 Materials & Services, 7,492,966, 46% Personnel, 8,665,485, 54%

7 FY17 PROJECTED OPERATING EXPENSE GOVERMENTWIDE - $18,376,673 Materials & Services, 8,861,907, 48% Personnel, 9,514,766, 52% FY18 PROPOSED OPERATING EXPENSE GOVERMENTWIDE - $18,356,749 Materials & Services, 8,565,803, 47% Personnel, 9,790,946, 53%

8 Financial forecast General Fund 5 Year Projection $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- FY18 FY19 FY20 FY21 FY22 Revenues Expenditures Ending Fund Balance (EFB) Minimum Recommended EFB The chart above projects the revenue, expense and ending fund balance for the next five (5) fiscal years. While over this five year period the ending fund balance declines by almost $1 million and the expense are about $400 thousand more than revenues, this is accomplished with a planned transfer of $1.2 million each year to the reserve and capital funds set up for the General Fund. In fiscal year 2018, this amount is actually $2.6 million. The minimum recommended ending fund balance (EFB) is approached by the actual projected EFB in fiscal year The minimum recommended EFB is three months of average expenditures. So, while the EFB is projected to decrease, this is more than made up by the increase to reserve and capital funds. Staffing changes Community Corrections An Office Assistant II will be replaced with a Case Aid to assist in low risk supervision. Public Works A Road Laborer and a Road Tech positions will be added to aid in succession planning for retirements. District Attorney The current Office Assistant position will move from 0.6 FTE to 0.8 FTE. This is to enable getting discovery information out in a timelier manner. Information Services A temporary IS Tech will be hired to assist with potential staff transitions and coverage for an employee due to a FMLA covered issue. Sheriff s Office The Emergency Management Coordinator will increase from.75 FTE to 1.0 FTE. This position will take on additional communication duties that fit in with the role.

9 Assessment & Taxation (Assessor s Office) A temporary Property Tax Appraiser II will be hired to assist in system cleanup and reassessments of property. There were three temporary positions in fiscal year 2017, this will be a net decrease of two positions. Elected Officials In fiscal year 2017, all non-represented, unelected staff received a 4.1% market based adjustment. The Compensation Committee met and determined this is appropriate for elected officials and recommended the rate increase. In the new fiscal year, the budget includes the recommended market based adjustment for elected officials. FISCAL YEAR 2018 BUDGETED PERSONNEL EXPENSE GOVERNMENT-WIDE $9,790,946 SHERIFF 37% ADMINISTRATIVE SERVICES 17% COUNTY CLERK 3% ASSESSMENT & TAXATION 7% YOUTH SERVICES 6% HHW 1% PUBLIC WORKS 15% ADMINISTRATION 3% DISTRICT ATTORNEY 4% PLANNING 7% Fund FY17 Budget FY18 Budget $ Difference % + OR - GENERAL FUND $ 6,675,484 $ 6,529,819 $ (145,665) -2.2% PUBLIC WORKS FUND $ 1,624,939 $ 1,414,465 $ (210,474) -13.0% COUNTY FAIR FUND $ 44,103 $ 20,538 $ (23,565) -53.4% LAND CORNER PRESERVATION FUND $ 56,039 $ 17,920 $ (38,119) -68.0% HOUSEHOLD HAZARDOUS WASTE FUND $ 117,584 $ 92,176 $ (25,408) -21.6% MUSEUM $ 44,669 $ 27,996 $ (16,673) -37.3% WEED & PEST CONTROL FUND $ 93,588 $ - $ (93,588) % 911 COMMUNICATIONS FUND $ 825,122 $ 856,332 $ 31, % PARKS FUND $ 36,343 $ 25,100 $ (11,243) -30.9% COMMUNITY CORRECTIONS FUND $ 675,870 $ 727,984 $ 52, % YOUTH THINK $ 73,971 $ 78,616 $ 4, % Total Personnel $ 10,267,712 $ 9,790,946 $ (476,766) -4.6%

10 Transfers The following transfers between funds serve one of three purposes; 1) supporting operations, 2) supporting reserve commitments, or 3) closing out a fund to condense operations into another fund (Weed & Pest is being merged with Public Works). From To Amount Reason General Fund Fair 29,000 Operations - Insurance General Fund Museum 17,500 Operations General Fund 911 Communications 183,987 Operations General Fund Capital Acquisition 700,000 Building Improvement General Fund Capital Facilities Relacement 700,000 Facilities Reserve General Fund Operating Reserve 700,000 Reserve Public Works Road Reserve 2,000,000 Reserve Economic Development General Fund 190,000 Lottery support of Planning Economic Development General Fund 397,500 Economic Development Economic Development Museum 2,500 Operations Land Corner General Fund 2,500 Administration Forest Health General Fund 75,000 Reimburse Search & Rescue District Attorney General Fund 1,800 Administration Weed & Pest Public Works 220,495 Close out fund Capital Outlay The current budget for Capital is $22.0 million. However, this includes $15.6 million in reserves that are budgeted to be available in needed but a need may not come up. The CDBG Grant project accounts for $5.4 million. This leaves for normal operations accounting for $1.0 million. The list below summarizes the outlays and the purpose.

11 Fund Purpose Amount General Buildings 300,000 General Four (4) vehicles for fleet 120,000 General Equipment 52,186 General Computer Replacements 106,750 Public Works Equipment 25,000 Public Works Dump Truck 175,000 Public Works Preservation Project 60,000 HHW Vehicle 6,500 Community Corrections Three (3) vehicles for fleet 85,000 Clerk Records Equipment 5,000 CDBG Grant Grant Project 5,365,122 Road Reserve Reserves 4,850, Equipment Reserve Reserves 91,795 Facilities Capital Reserve Reserves 3,429,005 General Operating Reserve Reserves 3,607,552 Capital Acquisitions Reserves 3,709,600 Total Capital Outlay 21,988,947 Personnel Personnel costs account for 17.6% of the entire fiscal year 2018 Proposed Budget and 53.3% of just the operations cost of the fiscal 2018 Proposed Budget PERS PERS set rates every two years. The current PERS rates will expire on June 30, 2017 and be replaced with the new rates. The rates are summarized below. Rate Type 2017/ / / / /11 Tier 1& % 15.87% 12.64% 12.81% 8.65% OPSERP General 11.52% 8.86% 9.80% 9.50% 7.34% OPSERP- Police & Fire 16.29% 12.97% 12.53% 12.21% 10.05% Represented +6% +6% +6% +6% +6% The 6% contribution over and above the required percentage is paid by the County for represented employees.

12 Insurance Health insurance increase has been budgeted at 12.6% increase that will go into effect January 1 st, The budgeted increase for dental insurance is a 7% increase going into effect January 1 st, Reserve Funds Currently, Wasco County has three unrestricted Reserve Funds and two restricted Reserve Funds. The difference derives from the source of revenue used in the funds. The National Advisory Council on State and Local Budgeting (NACSLB) and the Government Finance Officers Association recommend that all governments develop a formal, written fund balance policy which includes outlining reserve fund purposes and goals that is made publicly available. Facility Capital Reserve - unrestricted The purpose of this reserve is to save for facility capital improvements or replacements that; due to the inherently high cost of development, cannot normally be achieved in a single budget year. Additionally, this fund can be used for infrastructure improvements, or replacements to enhance efficiency or effectiveness of county operations. Examples of projects may include major building remodels such as the replacement of the Courthouse electrical or plumbing systems, construction of a new building, or purchases of software that make the County more efficient or effective. Capital Acquisition - unrestricted This reserve account is created to allow Wasco County to fund a reserve specifically for capital acquisitions and capital development activities. This fund will be built over time with the goal of having a pool of money available to acquire or develop real property. Operating Reserve Fund - unrestricted This fund was created to offset future operating shortfalls as part of our long term forecasting. For example, the uncertainty of receiving timber dollars and state funding streams impact operating and program decisions. Having a reserve fund to help sustain services will help facilitate change and assist in long term budgeting. Road Reserve Fund - restricted This fund is necessary to help protect the county if a natural disaster destroys any function or component of the county road infrastructure. May also be used to replace or repair major road equipment essential in maintaining the infrastructure and/or be used to continue operations in any of the five districts.

13 911 Equipment Reserve Fund - restricted This fund was created in anticipation of replacing any equipment related to the operations of the 911 Communications Center. Facility Capital Reserve^^ Capital Acquisition^^ Operating Reserve^^ Road Reserve^ 911 Equipment Reserve^ FY18 FY17 FY16 FY15 FY14 3,429,005 2,734,000 1,082,622 1,026, ,177 3,709,600 2,802,650 1,335,688 1,228, , ,552 2,812,000 1,431,379 1,326, ,503 4,850,437 2,815,000 2,792,094 2,782,550 2,767,601 91, , , , ,987 Total 15,688,389 11,812,000 6,879,800 6,601,059 4,478,945 ^Restricted reserve funds the Road Reserve increased significantly due to moving $2 million from fund balance in the Public Works fund to reserves. 911 Equipment reserve decreased due to the planned purchase of equipment. ^^Non-restricted reserve funds continued to rise and this enables the County to plan for the future and handle unplanned events. The reserve levels are closer to accomplishing those best practice and citizen safe measures. Contingency and Ending Fund Balance The General Fund Contingency assigned amount shall be no more than thirty percent of the unassigned fund balance. The current budgeted contingency amount of $1,281,000 is 29.5% of the budgeted unappropriated (unassigned) amount. The General Fund unappropriated (unassigned or Ending Fund Balance) must be at least two months of total personnel services and no more than four months of total operating expenses. The current unappropriated amount is within that range at $4,347,230.